The Central Bank of Argentina published a speech by its president outlining the authorities’ approach to the stabilisation programme and the next steps for foreign exchange and monetary policy. The remarks frame the strategy as a step-by-step shift from an exchange-rate anchor toward a regime based on monetary aggregates, with an eventual move to free floating and “currency competition”, while emphasising that reserve accumulation should follow macro normalisation and remonetisation rather than be pursued as an objective in itself. The speech highlights that the programme launched in December 2023 prioritised eliminating the fiscal deficit and describes progress in normalising the foreign exchange market and financial system. It points to a transition to a banded float with “minimal restriction” and an initial band width of 40%, alongside a stated path to full liberalisation as the bands widen and as rules such as multinational dividend distributions for financial year 2025 come into effect. The address cites improvements including US dollar deposits rising from USD 13bn to USD 35bn, US dollar credit near historical highs at USD 18bn, reserves sufficient to cover banks’ reserve requirements, record reserve purchases of almost USD 30bn, base money increasing from 2.5% to 4.5% of GDP, and remunerated central bank liabilities falling to zero. It also indicates that if the Treasury regains capital market access, the central bank would stop providing reserves for sovereign debt payments, and argues that sustainable reserve gains at this stage should come from growth and capital inflows rather than an artificially high real exchange rate. On the financial sector, the speech anticipates industry consolidation and new entrants, reports that real private-sector credit has doubled over the past year and a half, and expects the expansion cycle to re-accelerate from November. While noting a recent increase in arrears, it says these remain within expectations and forecasts a strong increase in capital demand from mid-2026 as credit expansion continues, including through fintech-originated lending.
Central Bank of Argentina 2025-11-18
Central Bank of Argentina president sets out cautious path toward full foreign exchange liberalisation under a banded float and monetary aggregates targeting
The Central Bank of Argentina's president announced a shift from an exchange-rate anchor to a monetary aggregates regime, aiming for eventual free floating and "currency competition." The speech highlighted progress in normalising the foreign exchange market, transitioning to a banded float with minimal restrictions, and significant increases in US dollar deposits and credit. Sustainable reserve gains should come from growth and capital inflows, with the financial sector expected to consolidate, welcome new entrants, and see a re-acceleration of credit expansion.